Answer:
The method variables such as depth of solution, data collection method etc. vary the rate of photosynthesis due to their influence on the variables of light intensity, temperature, carbon dioxide, light quality.
Explanation:
During photosynthesis, O2 gas is used and CO2 is produced simultaneously using a light as energy source whose intensity may vary, a solution with different depth varies to provide water and sodium bicarbonate varies to provide dissolved CO2 as the more sodium bicarbonate is added, there is a greater amount of carbon dioxide on it, this will resultin an increase in the speed of photosynthesis.
There is always the possibility of human error in experiment variables which may lead to different measures of the maximum rate on photosynthetic capacity (Amax) or the rate in which leaves are able to fix an amount of carbon dioxide per metre squared per second, for example as μmol m−2 sec−1.
A Fraternal Benefit Society has each of the following characteristics EXCEPT
A. Incorporated
B. Without capital stock
C. Exists For profit
D. Exists for the benefit of its members
Answer:
Answer is option C, i.e. Exists for profit.
Explanation:
A fraternity benefit society or benefit society are incorporated body that exist to provide benefits and insurance during any sundry difficulties to its various registered member. These societies do not have any beforehand capital stock with them. And also these societies do not operate for profit motive as their ultimate help is to provide financial support to its members in times of need.
A Fraternal Benefit Society is a non-profit organization that provides benefits to its members. It's typically incorporated, without a capital stock and doesn't exist for profit. So, the characteristic 'Exists for profit' does not apply to a Fraternal Benefit Society.
Explanation:A Fraternal Benefit Society is a type of non-profit, mutual aid organization that operates under a lodge system, providing life insurance and other benefits to its members. It is typically incorporated and does not have capital stock, as these societies are typically owned and operated by the members themselves.
A key element that defines such societies is their primary purpose for existing. They exist mainly not for profit, but rather to provide support and benefits to each other, namely their members. From these characteristics, we can see that the option 'C. Exists For profit' does not describe a Fraternal Benefit Society, as their main goal is not to generate profit.
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Four consumers each want to buy a refrigerator. Without a retail intermediary like Best Buy, fridge manufacturers Walton, Sub-Zero, Bosch, Kenmore, and General Electric would each have to make four contacts to reach the four consumers who are in the target market, for a total of twenty transactions. But when Best Buy acts as an intermediary between the producer and consumers, each producer needs to make only one contact, reducing the number to nine transactions. This is an example of a ______.
Answer: Retailer offering the contact efficiency
Explanation:
According to the given question, the given scenario is an example where the retailer offering the contact efficiency as it basically reduce the total number of the transactional attempts for providing the goods and the sevices to the customers or users.
It basically available the products in the specific location by using the intermediary system between the supplier and the customer. The contact efficiency control all the production sales in the market.
Therefore, Retailer offering the contact efficiency is the correct answer.
The concept demonstrated in the question is called disintermediation. Retail intermediaries like Best Buy act as a bridge between producers and consumers, decreasing the number of transactions required for producers to reach their potential customers.
Explanation:The example you provided demonstrates a concept called disintermediation. Traditionally, retail intermediaries such as Best Buy acted as facilitators between producers and consumers, reducing the number of interactions or transactions required for producers to reach their target market. By collecting products from multiple manufacturers and offering them to consumers in one location, they increase market efficiency and reduce transaction costs for both parties. Hence, instead of each fridge manufacturer having to reach out to four customers individually, they can reach out to Best Buy, presenting their products to multiple consumers at once.
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A plan that lists the types and amounts of operating expenses expected that are not included in the selling expenses budget is a:a. Sales budget b. General and administrative budget c. Capital expenditures budgetd. Selling expense budget e. Purchases budget
Answer:
C- general and administrative budget
Explanation:
The general and administrative expense budget focuses on operating expenses like administrative salaries, depreciation, and office expense. They are non- selling expenses
The 80–20 principle and the concept of the ""heavy half"" are most closely associated with the _________________ method of segmenting and positioning to target markets
The 80-20 principle and the concept of the heavy half are most closely associated with the usage rate method of segmenting and positioning to target markets
Explanation:
In the 80-20 principles the concept is that the eighty percent of the effect are due to the twenty percent of causes and this concept was developed by Pareto and it also states that 20 percent of the activities can also cause to 80 percent of your success
Heavy half concept is also like the 80-20 principle and it states that the that 80 percent of the volume will be consumed by 20 percent of the customers and hence both the principles uses the usage concept
Commercial Paper securities
A) are issued only by the largest and most creditworthy corporations, as they are unsecured.
B) carry an interest rate that varies according to the firm's level of risk.
C.never have a term to maturity that exceeds 270 days.
D all of the above.
E) only A and B of the above.
Answer:
D all of above
Explanation:
Commercial paper securities are unsecured promissory notes, issued by corporation, that matures in no more that 270 days.Because these securities are unsecured,only the largest and most creditworthy corporations issue commercial paper.The interest rate the corporation is charged reflects the firms level of risk.
Therefore Option D is the correct answer
A canadian agent has an existing client who goes on vacation to Seattle, Washington. The agent wishes to contact the customer in seattle about an investment that he wishes to recommend. The agent:
Answer:
The exception is due to vacation.
Explanation:
This is an example of a right answer, while, yes the individual must be registered in Canada, the exception is due to vacation.
Alatorre purchased a patent from vania co. for $1,000,000 on january 1, 2015. the patent is being amortized over its remaining legal life of 10 years, expiring on january 1, 2025. during 2017, alatorre determined that the economic benefits of the patent would not last longer than 6 years from the date of acquisition. what amount should be reported in the balance sheet for the patent, net of accumulated amortization, at december 31, 2017?
Answer:
accumulated amortization patent 400,000 dollars
Explanation:
patent original cost: 1,000,000
amortized for 2 years (2015 and 2016) with a useful life of 10 years:
1,000,000 / 10 = 100,000 per year x 2 years = 200,000
1,000,000 - 200,000 = 800,000
Now, as new information is determined we concluce the original useful life was 6 years from acquisition thus, leaving 4 years
800,000 current value / 4 years = 200,000 amortization for 2017
For a total of 200,000 previous + 200,000 for 2017 = 400,000
"The amount that should be reported in the balance sheet for the patent, net of accumulated amortization, at December 31, 2017, is $700,000.
The straight-line amortization expense per year would be calculated as follows:
Amortization expense per year = Purchase price / Remaining legal life
Amortization expense per year = $1,000,000 / 10 years
Amortization expense per year = $100,000
For the years 2015 and 2016, the amortization expense would be $100,000 each year. Therefore, the total amortization expense for these two years would be:
Total amortization expense for 2015 and 2016 = 2 * $100,000
Total amortization expense for 2015 and 2016 = $200,000
However, in 2017, Alatorre determined that the economic benefits of the patent would not last longer than 6 years from the date of acquisition. This means that the useful life of the patent for accounting purposes has changed, and the remaining balance of the patent needs to be amortized over the remaining economic life.
The remaining balance of the patent at the beginning of 2017 is:
Remaining balance = Purchase price - Total amortization expense for 2015 and 2016
Remaining balance = $1,000,000 - $200,000
Remaining balance = $800,000
The new amortization expense per year based on the revised economic life of 6 years is:
New amortization expense per year = Remaining balance / Remaining economic life
New amortization expense per year = $800,000 / 6 years
New amortization expense per year = $133,333.33 (approximately)
The amortization expense for 2017 would be $133,333.33. Therefore, the accumulated amortization at the end of 2017 would be the sum of the amortization for 2015, 2016, and 2017:
Accumulated amortization at the end of 2017 = Total amortization expense for 2015 and 2016 + Amortization expense for 2017
Accumulated amortization at the end of 2017 = $200,000 + $133,333.33
Accumulated amortization at the end of 2017 = $333,333.33 (approximately)
Finally, the net book value of the patent at December 31, 2017, would be:
Net book value = Purchase price - Accumulated amortization at the end of 2017
Net book value = $1,000,000 - $333,333.33
Net book value = $666,666.67 (approximately)
However, due to the change in the amortization method, we need to adjust the net book value to ensure that the remaining balance is amortized over the remaining economic life of 6 years. The adjusted net book value at the end of 2017 would be:
Adjusted net book value = Purchase price - (Amortization expense per year * Number of years already passed)
Adjusted net book value = $1,000,000 - ($133,333.33 * 3 years)
Adjusted net book value = $1,000,000 - $400,000
Adjusted net book value = $600,000
This adjusted net book value reflects the remaining economic benefits of the patent, and it is the amount that should be reported in the balance sheet at December 31, 2017. However, we must also consider the amortization expense for 2017, which has already been recognized. Therefore, the final net book value reported in the balance sheet would be:
Final net book value = Adjusted net book value - Amortization expense for 2017
Final net book value = $600,000 - $133,333.33
Final net book value = $466,666.67 (approximately)
Upon reviewing the calculations, it appears there was an error in the final step. The correct final net book value should be:
Final net book value = Adjusted net book value - Amortization expense for 2017
Final net book value = $600,000 - $133,333.33
Final net book value = $466,666.67
However, this does not match the provided answer of $700,000. To reconcile this discrepancy, let's re-evaluate the amortization expense for 2017. Since the economic life was revised to 6 years at the end of 2017, the amortization for 2017 should be based on the remaining balance at the beginning of 2017 divided by the remaining economic life:
Amortization expense for 2017 = Remaining balance at the beginning of 2017 / Remaining economic life
Amortization expense for 2017 = $800,000 / 6 years
Amortization expense for 2017 = $133,333.33
The accumulated amortization at the end of 2017 would then be:
Accumulated amortization at the end of 2017 = $200,000 (for 2015 and 2016) + $133,333.33 (for 2017)
Accumulated amortization at the end of 2017 = $333,333.33
The net book value at the end of 2017 would be:
Net book value at the end of 2017 = Purchase price - Accumulated amortization at the end of 2017
Net book value at the end of 2017 = $1,000,000 - $333,333.33
Net book value at the end of 2017 = $666,666.67
Since the amortization expense for 2017 has been calculated based on the revised economic life, the net book value at the end of 2017 is correct at $666,666.67. Therefore, the initial answer provided ($700,000) was incorrect, and the correct net book value to be reported in the balance sheet at December 31, 2017, is $666,666.67."
Peter, a British citizen, and Keith, a U.S. citizen, are employees of an electronics manufacturing company headquartered in London. While Peter works out of the London office, Keith operates out of the marketing unit in New York. Which of the following statements is true in this scenario?
A.
Peter is a host-country national.
B.
Peter is a parent-country national.
C.
Peter and Keith are expatriates.
D.
Keith is a third-country national.
E.
Keith is a home-country national.
Answer:
The correct answer is option B.
Explanation:
An electronics manufacturing company is headquartered in London. It has a marketing unit in New York.
Peter is a British resident, who works in the London office of the company. Keith is a US citizen and works in the New York marketing unit.
Since the company is headquartered in London, its parent country is Britain. The US is a host country for the company.
So Peter is a parent country national and Keith is host country national.
(Scenario: Sugar Trade in Birdonia) In autarky, suppose that equilibrium sugar price is $100 per ton in Birdonia, a small agricultural nation. Now, suppose Birdonia engages in free trade with the rest of the world. The world price of sugar is $125 per ton. What action must the government of Birdonia take to ensure that Birdonians do not import sugar at the world price of $125?
Final answer:
To prevent imports of sugar at a higher world price, the government of Birdonia may use trade barriers such as tariffs, quotas, or an import ban to protect its domestic market.
Explanation:
To prevent Birdonians from importing sugar at the world price of $125, which is higher than the autarky price of $100, the government of Birdonia could implement trade barriers such as tariffs, quotas, or even an import ban. A tariff would increase the cost of imported sugar, making it more expensive than local sugar, while a quota would limit the amount of sugar that could be imported, thereby limiting the supply and keeping prices at a desirable level. An import ban would disallow the import of sugar outright, ensuring that the domestic market is reliant on locally produced sugar.
Considering the provided reference information, if free international trade between Brazil and the United States takes place, it could lead to an equilibrium in both countries' sugar prices due to the influence of exports and imports. The scenario described involves Brazil potentially exporting sugar to the United States, which could similarly impact the situation in Birdonia if they were to engage in free trade without protections.
Government intervention is sometimes necessary in maintaining the domestic market's stability and can be done through various methods as mentioned, according to the specific needs and policies of the nation.
______________ is when a resource is not fully utilized, such as when your Economics professor has to sweep the streets as a primary job.
A) Under-employment
B) Unemployment
C) Inflation
D) Economic Efficiency
Answer:
The correct answer is under-employment.
Explanation:
Under-employment is when a resource is not fully utilized, such as when your Economics professor has to sweep the streets as a primary job.
Unemployment mean no job at all. It is situation in which workers are jobless, either because of no availability of jobs or because wokers are not accepting jobs at the going low wage rate. However, under-employment is a situation in which workers get part time jobs or jobs requiring lower education, training and skills than they have. It is quite common in under developed countries.
Parco has the following three subsidiaries: Finco, Serco, and Euroco. Finco is a 100% owned finance subsidiary. Serco is an 80% owned service company. Euroco is a 100% owned foreign subsidiary that conducts operations in Western Europe. Which one of the following is the most likely number of entities, including Parco, to be included in Parco's consolidated financial statements?
A. One.B. Two.C. Three.D. Four.
Answer:
D. Four
Explanation:
A consolidated financial statement includes financial information of all commonly-owned business. In this case, Parco has full ownership of two subsidiaries, and four-fifths of the service company. Parco has then control over the three entities and therefore, they should be included in the consolidated financial statements.
Josephine would like to become part of an elite manager network at her company so she can get access to general and line management experience to help her succeed within the company. However, she learns that the manager network is made up exclusively of men.
This demonstrates which factor affecting women’s careers?
A. Female advantage
B. Opt-out trend
C. Glass ceiling
D. Glass wall
E. Opaque ceiling
Answer: (C) Glass ceiling
Explanation:
The glass ceiling is one of the concept in the united state which demonstrate about the efforts of the minorities level group and the women for reaching at the top rank in the management sector.
It is basically regardless about the achievement and also the qualification of the women ad the minorities in the united states. The glass ceiling is also refers to the persuasive resistance.
Therefore, Option (C) is correct.
Two traditional economies are trying to industrialize. The leaders of the first favor a command economic system. The leaders of the second want to try more free market-based policies. What actions would likely occur in one but not the other industrializing economy?
Answer:
In the country that promotes free-market economy is expected to start seeing firms arriving in this country and invest in those activities where this country has a comparative advantage.
Explanation:
This would lead to an efficient allocation of productive resources taking the economy to optimum production. The technology and tools will rapidly spread, and the industrialization process will be achieved. In the other country, investment and technology implementation is lead by the government allocating resources inefficiently and delaying industrialization.
If $50,000 is invested at a simple interest rate of 8 percent, what is the net amount payable at the end of five years?
A.
$70,000
B.
$50,000
C.
$60,000
D.
$80,000
E.
$90,000
Answer:
A - 70,000
Explanation:
Simple interest rate means that same amount of interest will be earned on the original amount invested, ie 50,000.
So, interest for one year is 50,000 * 8% = 4,000. So for 5 years, total interest will be 20,000 (4,000 * 5 years). Hence total amount is $ 50,000 + $20,000 = $70,000.
Answer:
A. $70,000
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Sally has seen such great interest in her scented candles that she has decided to start her own small business selling them. Sally's company can use the Internet and the World Wide Web to operate globally, helping her get a global business started more easily because she can put products on a website and sell worldwide. So, in a sense, the Internet wipes out the former advantages of distribution and scope that large companies used to have.
A. True
B. False
Answer: True
Explanation:
Sally by taking her business to the internet can now be able to reach a global customer base, therefore this increases her business scope.
This implies she can now reach the same wide range of distribution of customers with a her small business as large companies could, by simply creating a website for her business and placing it on the world wide web.
Which of the following is defined as a contract which prescribes the technical support or business parameters that a provider will bestow to its client?
1. Final audit report
2. Mutual aid agreement
3. Service level agreement
4. Certificate practice statement
Answer:
Service level agreement.
Explanation:
Service level agreement is a contract between a service provider and a client. Agreement is made on the quality and availability. What is expected by the client should be rendered as it is agreed upon on the contract.
For an institutional investor to qualify as a "QIB" under Rule 144A, the institution must have at least: A $1,000,000 of assets that it invests on a discretionary basis B $10,000,000 of assets that it invests on a discretionary basis C $100,000,000 of assets that it invests on a discretionary basis D $1,000,000,000 of assets that it invests on a discretionary basis
Answer:
C) $100,000,000 of assets that it invests on a discretionary basis
Explanation:
For an institutional investor to qualify as Qualified Institutional Buyer (QIB) under Rule 144A of the Securities and Exchange Commission (SEC) it must:
manage at least $100 million worth of securitiesthe securities must come from issuers that are not affiliated with the institutional investorIn case of banks or savings and loans institutions, Rule 144A requires them to have a net worth of at least $25 million.
The project plan is supported by:
1. The work breakdown structure, the budget, and the work packages.
2. The work breakdown structure, the budget, and the schedule.
3. The work breakdown structure, the work packages, and the schedule.
4. The work breakdown structure, the schedule, and the contingency plan.
Answer:
3. The work breakdown structure, the work packages, the budget and the schedule.
Explanation:
Supporting plans for the Project plan includes:
Resource plansCommunication PlansRisk management plans Quality plansBudget Procurement plans ScopeDelivery scheduleBased on this we can say that option 3 is correct since it includes budget & schedules.
Identify the examples of abilities. Check all that apply. Kelvin is good at giving speeches. Elaine knows how to drive a car. Wilma would like to study history. Ira was raised in a Jewish family. Cam can run for long distances. Viola has a goal of getting up earlier in the morning.
Answer:
Examples of abilities:
- Kelvin is good at giving speeches.
- Elaine knows how to drive a car.
- Cam can run for long distances.
Explanation:
Answer:
Kelvin is good at giving speeches.
Elaine knows how to drive a car.
Cam can run for long distances
Explanation:
Kelvin, Elaine and Cam all have examples of abilities (things they can do).
Which career pathway requires that employees have stamina, stress-management skills, confidence, persuasiveness, and specialized knowledge about a product or service? a. Professional Sales and Marketing b. Marketing Information Management and Research c. Marketing Communications and Promotion d. Buying and Merchandising
Answer:
a. Professional sales and marketing
Explanation:
Sales and marketing team of any company play a vital role in developing business and making it profitable, however, it require lot of hard work, planning, stamina, and stress management, which help the sales and marketing professionals to meet up the company´s target. Sales and marketing are pulse of the company, without it no other department will grow as there will be lack of business. Confidence, persuasiveness and knowledge are key for making sales. A good sales person are the one who knows what is he/she selling, and whom to sell.
The career pathway requiring stamina, stress-management skills, confidence, persuasiveness, and specialized knowledge is Professional Sales and Marketing, which emphasizes strong communication, detail-orientation, integrity, and dexterity.
The career pathway that requires employees to have stamina, stress-management skills, confidence, persuasiveness, and specialized knowledge about a product or service is a. Professional Sales and Marketing. This field necessitates a high level of communication skills, as professionals must effectively convey the value of their products or services to potential clients. Additionally, those in sales and marketing must be detail-oriented and have the dexterity to navigate the dynamic nature of customer interactions. Furthermore, integrity is crucial in building trusting relationships, while physical stamina and stress-management are important to handle the often-demanding nature of the job.
What is the distinction between automatic and discretionary fiscal policy? Automatic fiscal policy is ______. Discretionary fiscal policy is ______ . a. the multiplier effect that follows an increase in government expenditure; initiated by an act of Congress b. triggered by the state of the economy with no action by government; initiated by an act of Congress c. the multiplier effect that follows an increase in government expenditure; initiated by the President of the United States d. triggered by the state of the economy with no action by government; initiated by the President of the United States
Answer:
The correct answer is option b.
Explanation:
An automatic fiscal policy is a policy that corrects the fluctuations in the economy through its normal working without any intervention by the government.
A discretionary fiscal policy, on the other hand, is planned and excercised by the government.
It works through increase in taxes or reduction in the government spending without government.
In our macro Circular Flow, the Businesses are choosing to invest _____________ billion dollars..
Answer:
Total invest in macro circular flow is 3500 billion dollar.
Explanation:
Total invest in macro circular flow is 3500 billion dollar.
circular flow of economics is representation of circle which explain the economy condition of the market. it explain the inflow and outflow in economy. it keeps the record of money outflow and inflow.
It represent the basic relation that exist between the government, manufacturer and households. How money exchange through all these above stages.
If you expect the inflation rate to be 5 percent next year and a one-year bond has a yield to maturity of 7 percent, then the real interest rate on this bond is__________
Answer:
1.9%
Explanation:
Real interest is the return that investors would require without inflation.Money interest is the return that investors would require with inflation.The real interest can be calculated using the following formula:
(1+i)(1+r)=(1+)
where
i=inflation rate=5%
r= real interest rate
m= money interest rate =7%
(1+5%)(1+r)=(1+7%)
1+r=(1+7%)/(1+5%)
1+r=1.019
r=1.02-1=0.019
Real interest rate=0.019*100=1.9%
When Hakim asked Mary where she wanted to go for lunch, she said Chili's because she went there at least once a week and always liked it. Mary conducted an internal search for information.
a) true
b) false
Answer: True
Explanation:
An internal search involves a consumer making purchase decision based on reflecting on previous experience they have with the service/product of a brand. An internal search, is a very strong influencer of consumer purchase behavior.
Mary recalled her personal experience with Chili's restaurant when making a decision on where to get her lunch.
Maker-Bot Corporation has 10,000 shares of 10%, $90 par value, cumulative preferred stock outstanding since its inception. No dividends were declared in the first two years. If the company pays $400,000 of dividends in the third year, how much will common stockholders receive?A. $355,000B. $270,000C. $0D. $130,000E. $140,000
Answer:
D) $130,000
Explanation:
We can compute this by calculating the total dividends payable to preferred stock holders each year.
Dividends payable = 10,000 * 90 * 0.10 = $90,000
Since the shares are cumulative, the total preferred dividend payable at the end of third year is = $90,000 * 3 = $270,000
So common share in dividend = Total paid - Preferred dividend cumulative
Common Dividend share = 400,000 - 270,000 = $130,000
Hope that helps.
Money-creating transactions of a bank ( _________________ ) directly impact the money supply..
Answer:
Loans
Explanation:
The money-creating transactions of a bank that directly impact the money supply are loans.
We can illustrate why with this simple example:
Suppose Bank of America gets a deposit of $800 and the reserve requirement is 20%, thus, it will keep $160 in reserve and loan out the remaining $640.
Bank of America Balance Sheet
Assets Liabilities
Reserves $160 Deposits $800
Loans $640
The $640 that is loaned out is money that is in the hands of a person other than the one who deposited the $800 in the first place. In other words it is new money that Bank of America has created when it made the loan.
A sales manager at SFB Industries would like to import leads from a recent event. To ensure efficiency, she would like these to be automatically assigned to the relevant sales rep based on the state field. How can you set this up?
Answer:
3) Create a lead assignment rule
Explanation:
Salesforce uses lead assignment rules to define which sales rep is responsible for generating and supporting a sales lead (potential sale). Each organization is responsible for setting up the specific criteria used to assign sales leads. By using assignment rules this process can be automated.
For example, your lead assignment rule may be based on territory or sales status.
Jay Farnswood is the president of a local group of real estate agents. At their monthly luncheon meeting, Farnswood stood and told his colleagues that he simply could not survive by charging the 5 percent commission rate and noted, "I don't know what the rest of you are going to do, but I am going to charge 6 percent commission on all my listings starting today."
Farnswood's statements:
a. constitute price-fixing.
b. only reflect his intentions; there is no agreement to fix prices.
c. constitute an attempt to monopolize.
d. none of the above
Answer: Option A
Explanation: Price fixing is an arrangement between competitors that increases, decreases, or flattens rates or competing terms. In particular, the antitrust laws demand that each corporation, without negotiating with a competitor, set prices and other conditions by itself.
Price fixing applies not just to costs, but also to certain words that influence customers ' values, such as delivery charges, guarantees, rebate schemes, or levels of funding.
Which of the following statements is false?
1. By increasing the amount paid to debt holders through interest payments, the amount of the pretax cash flows that must be paid as taxes increases.
2. To determine the benefit of leverage for the value of the firm, we must compute the present value of the stream of future interest tax shields the firm will receive.
3. When a firm uses debt, the interest tax shield provides a corporate tax benefit each year.
4. Because the cash flows of the levered firm are equal to the sum of the cash flows from the unlevered firm plus the interest tax shield, by the Law of One Price the same must be true for the present values of these cash flows.
Answer:
1) By increasing the amount paid to debt holders through interest payments, the amount of the pretax cash flows that must be paid as taxes increases.
Explanation:
All businesses pay taxes based on their net profits after interest payments are deducted as expenses, therefore interest payments reduce the net profit. A lower net profit = lower corporate taxes paid. Only interest payments are considered expenses, principal payments are not considered expenses and don't reduce taxes.
"The correct option is 1. By increasing the amount paid to debt holders through interest payments, the amount of the pretax cash flows that must be paid as taxes increases.
Let's analyze each statement to determine which one is false:
1. This statement is false because increasing the amount paid to debt holders through interest payments actually decreases the amount of pretax cash flows that must be paid as taxes. This is because interest payments are tax-deductible expenses, which reduce the taxable income of the firm. Therefore, the tax liability of the firm decreases as interest payments increase, not the other way around.
2. This statement is true. The benefit of leverage for the value of the firm can indeed be computed by calculating the present value of the stream of future interest tax shields the firm will receive. Since interest payments are tax-deductible, they provide a tax shield that increases the value of the firm.
3. This statement is also true. The interest tax shield does provide a corporate tax benefit each year because interest expenses reduce the firm's taxable income, thereby lowering its tax bill.
4. This statement is true as well. The cash flows of a levered firm are indeed the sum of the cash flows from the unlevered firm plus the interest tax shield. By the Law of One Price, which states that identical assets must have the same price when traded in the same market, the present values of these cash flows should also be equal.
Which of the following best describes the consideration on the part of an insurer?
A. The purpose of the contract must be legalB. The promise to pay in the event of a covered claimC. The offer of the contractD. The acceptance of the contract
Answer:
B) The promise to pay in the event of a covered claim
Explanation:
The promise to pay in the happening of a covered claim apparently describes the promise to pay in the process of covered claim. In insurance matter of contracts, the insurer assures to pay for covered losses which the insured suffers and the insured promises to do what the contract says and pay the premium. Most non insurance contracts are fluctuating contracts. The amount of attention given by both parties are almost equivalent.
In insurances, 'consideration' typically means the insurer's promise to pay on a claim should the specified event occur, following the terms and conditions in the policy agreement.
Explanation:In the context of insurance, the term consideration refers typically to the promise to pay in the event of a covered claim. This binds the insurer in an agreements ensuring they will provide financial coverage to the policyholder, subject to the terms and conditions of the insurance policy.
For example, in a car insurance policy, the insurer's consideration is the promise to pay for any damages to the insured vehicle as per the coverages mentioned in the policy.
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